A merchant account is a special type of bank account that allows businesses to accept debit and credit card payments. This bank account retains the money derived from the company’s sales for a short term, typically between 2 and 7 days. After this time interval the money is transferred to the merchant’s actual bank account where its business funds are stored.
Prior to obtaining a merchant account vendors are put through a credit risk assessment by the acquiring bank. It aims to test if the candidate of such an account is suitable to take debit and credit card payments.